Prudential Financial (NYSE:PRU), not to be confused with Prudential plc (NYSE:PUK) of the U.K., is one of the largest life insurers in the world. Negative overall sentiment on any financial company has sent its stock toward its lowest levels over the past year. An appealing valuation and decent growth prospects overseas bode well for future shareholder returns.

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Recent Developments
On May 22, 2012, Prudential held its annual investor day and committed to raising its return on equity to between 13 and 14% by 2013. Implicit in this assumption is growth in its investment portfolio and stock market returns of 8% over the next couple of years. International growth, especially in Japan and parts of Asia, is expected to be the key growth driver. Cost cutting and share buybacks are also expected to make some positive impacts on per-share profits over the next couple of years.

SEE: A Breakdown Of Stock Buybacks

European Fears
Unlike U.K. rivals Prudential plc or Aviva (NYSE:AV), Prudential has minimal business exposure to Europe. As of the end of 2011, its primary exposure stemmed from its investment portfolio, which held roughly $17 billion in European sovereign government bonds, financial institutions and other entities. Though large in absolute levels, it is quite muted in the context of Prudential's investment portfolio of $355 billion and total asset base of $625 billion.

SEE: Investing In Sovereign Bonds

Outlook and Valuation
For all of 2012, analysts project total revenue growth of 9% and total revenues of nearly $43 billion. The consensus earnings estimate currently stands at $6.55 and is expected to rise nearly 19% to $7.76 for 2013. Based off book value of $74.35, this represents return on equity levels of 8.9 and 10.5% and forward P/E of seven and six, respectively.

SEE: 5 Must-Have Metrics For Value Investors

The Bottom Line
Prudential operates primarily in the U.S. and Japan, which are the two largest life insurance markets. According to a study provided in its investor day presentation, the market share of the global life insurance market came in at 27 and 24%, respectively, with the rest of Asia (excluding Japan) the next largest at 23%.

Japan is expected to be a future growth driver. Prudential is a leader domestically and now the third largest player in Japan, with a share of around 10.4%. Other rivals include Sumitomo Mitsui Financial Group Inc. (NYSE:SMFG) and even Sony (NYSE:SNE). Overall, the combination of decent international growth prospects, prospects for improved shareholder profits and a compellingly low valuation, bode well for future shareholder returns.

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At the time of writing, Ryan C. Fuhrmann did not own shares in any of the companies mentioned in this article.

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